New legislation would facilitate entry into the Utah real estate market for first-time purchasers

Salt Lake City, Utah – On Wednesday, the Utah Legislature approved two bills that will facilitate the entry of first-time homeowners into the housing market. These bills are currently on route to Governor Spencer Cox’s desk.

An amendment to HB 572 was added by the Utah Senate, which facilitates local banks’ participation in the Utah Homes Investment Program.

With six votes not present, HB572 was returned to the Utah House by a vote of 22 to 1. The plan uses excess State funds to lower the cost of borrowing for developers to construct starter houses.

Developers who want to participate in the scheme would have to promise that starter homes—which are defined as 1,400 square feet and cost roughly $350,000—would make up 60% of the homes constructed using program financing.

To allow smaller banks to participate, State Senator Curtis Bramble inserted an amendment to the Utah Homes Investment Program that requires the State to pay 100% of the funding for the programs, instead of the initial 20% provided by the banks and 80% by the State.
Bramble was worried that smaller banks would have to borrow money in order to take part in the scheme, but that the interest rate on that loan would have to be higher than what the State would pay.

thereby making a financial payment to participate in the program. After the amendment was successfully passed, HB572 was returned to the House for acceptance.

The governor will now get the measure.

HB13, which establishes Infrastructure Financing Districts and offers reduced interest financing through publicly traded bonds to assist developers in installing streets, curbs and gutters, sewers, and other infrastructure, was also approved by the Legislature on Wednesday.
Bond funding would be more affordable than business loans.

Both of these bills, according to Steve Waldrip, Senior Advisor to Governor Spencer Cox on Housing Strategy and Innovation, are excellent starting steps in assisting first-time homeowners in entering the housing market.

“No one has ever tried it before. We think we’ve got it right. We’ll see. We have great partners in our in our banks, our credit unions and our builders. They’re committed to making it work. Our cities are committed to doing their part. We think we’ve got the right formula. We’re pretty optimistic about the opportunity,” he said.

Both HB572 and HB13 are anticipated to be signed by the governor.